CONTINGENT CONTRACTS
CONTINGENT CONTRACTS What is a contingent contract According to Section 31, a contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does not happen. When the contract is dependent or conditional upon the happening or non-happening of a certain future event, the contract is contingent. For example, A contracts to pay B Rs. 10,000 if B's house is burnt, this is a contingent contract. (Illustration to Section 31). The payment of the amount is contingent on the happening of a collateral event, i.e., the burning of the house. All contracts of insurance or indemnity aim at payment of money only after a certain event happens, or the loss is caused, and, therefore, they are contingent contracts. A wagering agreement is also a contingent contract, but that type of contingent contract has been specifically declared to be void by Section 30. A distinction is to be drawn between a contract under which a present obligation is created...